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Valued at a market cap of $15.8 billion, Jacobs Solutions Inc. (J) engages in infrastructure, advanced facilities, and consulting businesses. The Dallas, Texas-based company provides a full spectrum of professional services, including consulting, technical, scientific, and project delivery for the government and private sector.
Shares of this engineering services company have lagged behind the broader market over the past 52 weeks. Jacobs has gained 7.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.7%. Moreover, on a YTD basis, the stock is down 3.4%, compared to SPX’s 2.2% rise.
Narrowing the focus, J’s underperformance becomes more evident when compared to the Industrial Select Sector SPDR Fund’s (XLI) 14.2% return over the past 52 weeks and 2.3% gain on a YTD basis.
On Feb. 4, Jacobs reported its Q1 earnings results, delivering adjusted earnings of $1.33 per share. While this represented an 8.3% decline year-over-year, it exceeded consensus estimates by 3.1%. Revenue grew 4.4% from the prior year to $2.9 billion, surpassing Wall Street expectations. A key positive was the company’s adjusted operating margin, which expanded by 210 basis points, driving a strong 24.9% year-over-year increase in adjusted operating profit.
Despite these solid results, Jacobs' stock fell 3.5% on the day of the announcement. Lower bottom-line figure due to an unfavorable tax comparison and softness in its advanced manufacturing sector might have dampened investor confidence.
For the current fiscal year, ending in September 2025, analysts expect Jacobs’ EPS to grow 14.6% year-over-year to $6.05. The company’s earnings surprise history is promising. It topped the Wall Street estimates in each of the last four quarters.
Among the 15 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on seven “Strong Buys,” two “Moderate Buys,” and six “Hold” ratings.
On Jan. 29, Citi maintained a “Buy” rating on Jacobs but lowered its price target to $160, which indicates a 24% potential upside from the current levels.
As of writing, J is trading below the mean price target of $154.25. The Street-high price target of $176 suggests an upside potential of 36.4%.
